Global oil reserves have increased over the years despite oil production increasing significantly over the last four decades
Technological improvements permit greater unconventional oil production
Unconventional reserves are now estimated to be 3.3 trillion barrels, compared to 2.6 trillion barrels of conventional oil
Oil demand is expected to continue growing over the medium term driven by growth across developing economies
Saudi Arabia, China and India, three of the top 5 oil consuming nations grew oil consumption by 35% between 2006 – 2011
Increase in marginal price will ensure price levels remain above USD 70 a barrel for the foreseeable future
Roland Berger Strategy Consultants have examined the current status of the global oil market, providing insights into both, the demand and supply drivers that will impact oil price over the medium to long term.
Why the world will not run out of oil
One of the most discussed topics in the energy sector is "Will the world run short of oil?". This question, often in the form of 'peak oil', is a driver of key decisions made not only in the oil industry, but across the energy sector and wider economy. "Given our research, this is very unlikely to occur in the medium term, and improbable in the long term", said Jaap Kalkman, Senior Partner at Roland Berger Strategy Consultants Middle East. "Total accessible reserves are increasing every year thanks to increased explorations for both conventional and unconventional oil and improved technology such as horizontal wells. Political instability, while still a factor, is not expected to have a huge impact on the future of oil supply. Furthermore, rising oil prices are making production from unconventional sources viable leading to an even more diverse source of supply. Non-OPEC countries and unconventional sources of oil are expected to continue driving growth in total oil supply in the future", he added.
Demand is expected to continue growing
Given this promising outlook in oil supply, the question is what will happen to demand, specifically: "Will demand stay flat in the long run?" Once again, research indicates that this is highly unlikely to happen in the next 10 – 15 years. Demand has been growing at an annual rate of 1.3% over the last decade. Rapid GDP growth after the financial crisis, low regulation in emerging economies and challenges faced by alternative energy sources mean that demand is expected to continue growing. Non-OECD countries are expected to account for a larger share or even all of demand growth in the future, given lower economic growth and higher oil efficiency in OECD countries.
Oil prices will not drop below USD 70 per barrel
The final question answered is "Will oil prices drop below USD 70 per barrel?" Apart from daily or weekly fluctuations, once again the answer is no. Increasing demand and supply along with the rising marginal cost of production, thanks to expensive tertiary extraction processes means oil prices are expected to continue rising in the future. Expensive unconventional oil production will drive price increases and stability in the future.
Contacts
Mia Mutic
Roland Berger Turkey, Middle East & Africa
+971 50 9105302
mia.mutic@rolandberger.com
www.rolandberger.com
Permalink: http://www.me-newswire.net/news/8970/en
No comments:
Post a Comment